MIL Predatory Lending Protections Act

Discussion in 'On Topic' started by Sharkticon, Oct 3, 2006.

  1. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    CONGRESS POISED TO ENACT HISTORIC PREDATORY LENDING
    PROTECTIONS FOR MILITARY FAMILIES
    —Defense Authorization Conference Report Would Cap Loan Interest Rates at 36 Percent—

    WASHINGTON D.C – The Consumer Federation of American today applauded Congress for agreeing to legislation that will protect military families from predatory lenders who charge triple-digit interest rates. The legislation, which was proposed by Senator Jim Talent (R-Missouri), Senator Bill Nelson (D-Florida) and Representative Sam Graves (R-Missouri), will cap annual interest rates on loans to military families at 36 percent. It is expected to pass the Senate and House of Representatives later today or tomorrow as part of the 2007 Defense Authorization bill (H.R. 5122.)

    “This historic legislation will protect members of the military and their families from financial predators who destroy their finances, damage their morale and undermine military readiness,” said Jean Ann Fox, director of consumer protection for CFA. “Congress is telling all lenders, including payday loan companies, tax preparation firms and banks, that they must not make loans to members of the military at exorbitant interest rates or under abusive terms.”

    “We commend Senators Talent and Nelson and Representative Graves for their extraordinary efforts to pass this landmark consumer protection bill,” said CFA Legislative Director Travis Plunkett. “We applaud them for standing up for America’s Service members in the face of significant pressure from the payday loan industry and their allies in Congress,” said Plunkett. “Senator Elizabeth Dole also deserves credit for laying the essential groundwork for this law by convincing Congress to require the Department of Defense to issue a study on the effect of predatory lending on the military.”

    The legislation, Section 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007, includes the following:

    • Interest Rate Cap. Prohibits any lender from imposing an annual percentage rate of interest of more than 36 percent on loans to members of the armed forces stationed anywhere in the world or their dependents. Interest is defined to include all extra charges and fees of any kind, including the sale of related products like credit insurance. This requirement complements existing federal law, which requires lenders to lower interest rates to six percent on loans that Service members open before they enlist.

    • No Check Holding or Electronic Access to Bank Accounts. Prohibits lenders from basing loans to Service members on the writing of checks without adequate funds in the bank to cover the check, or on electronic account access or wage allotments that allow lenders priority access to bank accounts or military pay. Loans secured by title to the Service member’s vehicle are also prohibited.

    • Legal Protections. Prohibits lenders from requiring Service members to agree to mandatory arbitration in the event of a dispute or to waive their legal right to recourse in the courts.

    The Department of Defense report to Congress documents that high cost lenders cluster around military bases and tout easy money loans via the Internet. Payday lenders entice Service members to write checks without money in the bank for loans at rates of 390 percent annual interest or higher. Military borrowers, who are required to maintain a bank account to receive direct deposit of military pay, are likely to become trapped in a cycle of repeat borrowing to keep those checks from bouncing.

    Car title loans, secured by the title to family vehicles owned free and clear, typically cost 300 percent annual interest. The owner risks repossession of the car if the loan is not paid in full or renewed every month. Installment loans, paid by military allotment or electronic access to the Service member’s bank account, often include unnecessary insurance premiums and extra fees that drive up payments.

    This legislation is supported by over seventy military and veterans groups, civil rights organizations and consumer groups, as well as the Department of Defense.
     
  2. Ranger-AO

    Ranger-AO I'm here for the Taliban party. Moderator

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    All those advance check cashing places outside of every CONUS base are gonna go broke! :rofl:
     
  3. Jyokker

    Jyokker The trouser snake is very aggressive. It will corn

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  4. Ranger-AO

    Ranger-AO I'm here for the Taliban party. Moderator

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    Believe it or not, most advance check cashing places charge much more than 36%.
     
  5. Jyokker

    Jyokker The trouser snake is very aggressive. It will corn

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    Understood, but you should be shot for being so careless with your finances.

    A fool and his money...
     
  6. Ranger-AO

    Ranger-AO I'm here for the Taliban party. Moderator

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    fixed
     
  7. Jyokker

    Jyokker The trouser snake is very aggressive. It will corn

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    Get out the plastic bags, this could get messy.
     
  8. Ranger-AO

    Ranger-AO I'm here for the Taliban party. Moderator

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    get some :wiggle:
     
  9. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    That's why we need to get the word out to our junior Sailors, Marines, Soldiers and Airmen.

    As a financial counselor, I've come to realize that alot of our new military folk have NEVER had a checking/savings account prior to entering service. Most never reconcilied a checking account nor used a checkbook register. Nor do they know what that high interest rate REALLY means. And then we're suprised when our folks are floating checks each payday. "Hey, this little piece of paper is like instant cash!!!"

    I think financial responsibility training should be mandatory in bootcamp.
     
  10. Jyokker

    Jyokker The trouser snake is very aggressive. It will corn

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    It is for us. I don't think it sticks.

    How are you a financial counseler?
    I would like to do financial counseling on the side while I am in the military. I start school for it on 15Nov06.
     
  11. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    Not sure what the AF has in the way of a Family Support Center but the Navy has a Fleet & Family Services Center where you can take classes on a variety of subjects and get certified in certain things. My command needed a departmental financial counselor so they sent me to take the class. They covered everything from predatory lending practices, checkbook management, car buying, etc.

    If the AF doesn't offer it, you could take the class, if available, at the closet Navy base that offers it.
     
  12. Jyokker

    Jyokker The trouser snake is very aggressive. It will corn

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    We have a class tomorrow, offered by USAA.
     
  13. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    Sweet. If you don't mind, give me a run down of the topics covered.
     
  14. Jyokker

    Jyokker The trouser snake is very aggressive. It will corn

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    I'm hoping it isn't a basic financing course. I'm sure I would still learn, but I want meat and potatoes.

    I am a little excited to start school in November. If you are AD Military and are interested in a Finance career, CTUOnline.com seems to have a pretty good program. I will have to decelerate it (take one class instead of two) so I can pay for it with taxpayers' money instead of loans.
     
  15. Sharkticon

    Sharkticon The safest place in combat is on an AEGIS Class Gu

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    I may look into it. Thanks for the info.
     
  16. Gatsby

    Gatsby New Member

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    Fort Knox has the worst. I love them though...."PAY DAY ADVANCE Up To $404!"

    Which is about what a PVT clears...
     
  17. Ranger-AO

    Ranger-AO I'm here for the Taliban party. Moderator

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    I don't see how those people sleep at night. :mad:
     
  18. Jyokker

    Jyokker The trouser snake is very aggressive. It will corn

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    On their beds of Benjamins.
     

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